Poundland could be sold for a pound, with the UK discount retail chain reportedly struggling amid tough trading conditions.
Back in March, its owner Pepco Group said it was considering “all strategic options” to spin out the struggling 825-strong chain from the wider group as it focused on its more profitable Pepco brand.
Now, with bidders circling the business, it has been reported it could be sold for just £1. Sources told The Times it could go for “effectively a pound” due to the significant turnaround needed to arrest its declining performance.
Gordon Brothers, the former owner of Laura Ashley, is thought to be the front runner to take control of the budget chain.
Interested parties reportedly also include Modella Capital, Alteri, owner of Bensons for Beds and Hilco Capital, which owns Lakeland.
However, formal offers are not set to be tabled until Monday.
Poundland made £1.6 billion in sales last year, but it has since endured tough trading. Its like-for-like sales fell 7.3 per cent in the three months to December 31, it reported in January.
As part of the plans, Pepco said former Poundland managing director Barry Williams, who took over as managing director of Pepco in September 2023, will return to his former role at Poundland ahead of a possible sale.
Stephan Borchert, chief executive of Pepco Group, said: “The board and I are actively exploring separation options for Poundland, including a potential sale, from the group, with consideration also given to the separation of the well-performing Dealz Poland over the medium term.
“Barry Williams did a great job as managing director of Pepco, returning it to like-for-like sales growth, and I am confident he will play a pivotal role in getting Poundland back on track, given his previous success there.”
A Pepco Group spokesperson said: “As announced at the Capital Markets Day on 6 March, Pepco Group is moving away from fast-moving consumer goods to create a simpler business focused on higher margin clothing and general merchandise, and is actively exploring separation options for Poundland, including a potential sale, from the Group.
“With Barry Williams’ re-appointment as managing director, Poundland is executing a turnaround programme to get the business back on track, focusing on its core heritage strengths, and a simpler pricing proposition and customer offer.”
Gordon Brothers have been approached for a comment.
